Advertising Creator online

The $1,000 CPM — Medium

I’m also in the bizarre position of being able to describe my feelings about this with a reaction GIF that is, in fact, me.

The CPM metric is not designed for creators; it’s designed for advertisers. It’s how much advertisers pay, not how much creators make. On a blog, there might be twelve different ad units, all with different CPMs. But independent creators need simple metrics, so we’ve adopted the CPM for ourselves. If that 12-unit page has an average of a $1 CPM per ad unit, then to the blogger, that’s a $12 CPM.

YouTube actually lumps this together in our analytics pages, so CPM has actually come to mean two different things. In this article, I’ll mostly be using it in the creator-centric way. Basically, to me a CPM is how much money I make per 1, 000 views (adding together all sources of revenue).

Here’s where I start sounding a little crazy: I’m not really interested in clawing our way to TV levels of monetization; I think our goal should be to do better than TV. And in a couple limited cases, I’ve actually seen it happen.

If creators can climb their way to a $1, 000 cumulative CPM, a person with an audience of just a couple thousand people would be able to be a full-time creator. That’s the world I want to live in.

This Is Not Actually Impossible

Imagine that you would like to consume a piece of content, but in between you and that content is a paywall. They’re asking for one person to view the content one time. While a YouTube video might net you per thousand viewers, this fantasy world I’ve just described will net you , 000 per thousand impressions…A , 000 CPM!

With a , 000 CPM, every two thousand views is a full-time, living-wage human per year!

Of course, this model would never work…except that it works every day at every movie theater in America.

Plus for a small popcorn. for the mega-jumbo size!

For a two-hour movie, that’s about 5 per minute per thousand people (remember TV shows made just $18 per minute per thousand people). Not to harp on this, but a YouTube video — if relying only on YouTube ads — makes around $0.50 per minute per thousand people.

If advertising is perfectly economically efficient, then we should be able to say that a YouTube video is 32× less valuable to a viewer than a TV show and 250× less valuable than a movie. I do not think we can say this. If you do, then you’re not going to care for the rest of this article…here’s a link to some cat videos.

For the rest of you, I think it’s safe to assume that we agree advertising is inefficient.

Before We Get Too Much Deeper

I want to point out the tremendous variety and quality of content that has been created within this extremely limited economic model. YouTube has helped people create at least three massive genres of cheap-to-produce, high-quality content that viewers really, really love. Video game ‘Let’s Plays’, style tutorials, and direct-to-camera monologues (which we in the biz call ‘Vlogs’) all fill those requirements and all score billions of views per month.

Felix Kjellberg, arguably the most successful YouTuber of all time, is of course known for his vlogs and ‘let’s plays’, but he’s dabbled in style as well.

Other content has been nearly impossible to make work. Narrative content has existed mostly as aspirational, money-losing, pre-pilot pilots for TV shows. Even content that TV people consider dirt cheap (like game shows, talk shows, and reality shows) is hard to produce with online video budgets.

I was the executive producer for the Lizzie Bennet Diaries which won an Emmy. I’m even more proud of the fact that it is one of the only narrative projects in online video to ever turn a profit, mostly because we did it on a shoestring.

Possibly the only genre that efficiently converted from TV to YouTube / Vine is sketch comedy, which has always had more to do with the skills of its creators than its budgets.

The content that has survived on YouTube is a direct result of crappy advertising revenue. It’s put a dramatic emphasis on getting the most views possible, not just per video but per day. The result: A kind of hyper-frequency, with some gaming channels uploading three to five videos PER DAY. Without volume, it’s hard to make it work.

Amazing things have been done with that $2 CPM, but so many things remain unimagined because the tools to create that content cost more than $2 per thousand views. There are so many smaller channels that could ‘make it’ but won’t and so many big ideas that no one will have because humans have a hard time imagining impossible things. How do we make those things possible?

People Have to Pay

Not all people, and not a ton of money, but some people.

The first thing to remember is that a $1, 000 CPM (that seemingly unachievable figure) is just every viewer paying an average of $1 per piece of content. That’s not crazy; it’s iTunes.

The other thing to remember (and that we so often forget) is that the ultimate value exchange in content is between creator and consumer of content (not creator of ads and consumer of ads). If someone watches something I’ve made, it’s because they consider it worth the four to twelve minutes it takes to watch it (and also worth the 5–30 seconds of ads beforehand).

The time they give is extremely valuable, and not just in the froofy community-building / personal validation way that’s important to me personally. It’s economically valuable, too. If we assume that a human’s free time is worth the U.S. minimum wage, then people have spent $600 million of their time with me. That’s not the kind of thing you can disrespect.

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Tweets

Saturday 2, April 2016 02:45 PMSachin Aggarwal

@KiranKS true. But online websites like toi, does not cost that much, still irrelevant, indecent, misguided, advertisements are shown

Saturday 2, April 2016 10:40 AMAndrewJulia

@AndrewJulia: Come up with straight a boat out of the expenseless advertisements in respect to online, in such wise alter is patently refractory: jToUcf